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Report: Brazil bumps budget announcement, re-evaluates higher taxes

Brazil Finance Minister Henrique Meirelles postponed a budget announcement until March 29 amid pressure from lawmakers to re-evaluate its use of tax increases, echoing a delay the previous week, Reuters reported March 28.

One presidential aide reportedly said officials are "trying to avoid tax hikes altogether or implement hikes that will not have a big impact on the economy and inflation." As result, Meirelles' economic team is now looking for revenues elsewhere to cover a 52 billion reais budget gap. A proposal has already been forwarded to raise the federal PIS and Cofins social security taxes.

"Congress will have difficulties approving tax hikes, so I believe the government needs to look for better options," Efraim Filho of the country's Democrats Party reportedly said to the newswire. The governing body may also be opposed to removing tax exemptions, which cost about 18 billion reais per year, the report added.

However, several members of Brazilian President Michel Temer's economic team believe a tax increase is inevitable in light of a recession, despite opposition to the measure.

As of March 28, US$1 was equivalent to 3.13 Brazilian reais.